Practo in talks with global investors to raise Rs 400 crore

The funding is aimed at extending Practo’s leadership in India and establishing it as a clear winner in a space that is becoming crowded.Madhav Chanchani | ET Bureau | June 09, 2015, 09:25 IST

The National Health Mission is expected to be part of budget 2013-14. The NUHM proposal, costing Rs 20,000 crore, has been cleared by the finance ministry's expenditure finance committee (EFC).Practo, an Internet based service to schedule appointments with doctors, is in advanced talks with global investors including Google Capital and Russian billionaire Yuri Milner for a funding round estimated at Rs 400 crore, according to two people directly aware of the plan.

The Bengaluru startup, backed by venture funds Sequoia Capital and Matrix Partners, could also attract more new investors in this round, slated to be one of the largest in the online healthcare segment globally. “The deal is expected to close in the next four to five weeks,” said one of the sources, who is involved in negotiations. Milner, who also heads investment firm DST Global, is expected to make a personal investment.

The funding, once it comes through, is aimed at extending Practo’s leadership in India and establishing it as a clear winner in a space that is becoming crowded. In the past year, startups like Lybrate, Ziffi and Qikwell have raised money and they also compete with search firms such as Just Dial.

Globally, New York-based ZocDoc is one of the most heavily funded startups in doctor-search space, having received up to $98 million from investors including Khosla Ventures and DST Global.

Practo — co founded by CEO Shashank ND and technology chief Abhinav Lal, both engineers from the National Institute of Technology, Surathkal— was estimated to be worth Rs 1,000 crore in its most recent round of fundraising in February, when it mopped up $30 million (Rs 189 crore) from Matrix Partners, Sequoia Capital and venture debt provider InnoVen Capital. This latest round is expected to close at a “significant premium.” Practo and Milner did not respond to email queries, while a spokeswoman for Google said, “We don't comment on rumors or speculation.”

The co-founders, both 27 years old, have moved swiftly to expand operations at the company they launched in 2008, while still on campus. They now have two software products on offer — one for consumers to search and book appointments with doctors and another used by doctors, clinics and hospitals to manage appointments and digitise records. Over 1.5 lakh doctors are listed on the service in over 35 Indian cities.

“This is the first of several acquisitions we have planned as we build out Practo to be the single health app you need,” CEO Shashank wrote in a blog post following the buyout. Operations have also been launched in overseas markets like Philippines and Singapore with plans being firmed up enter half a dozen more markets, according to people familiar with the company's plans.

Shantanu Jha, founder & CEO of Ziffi, which is backed by Rehan Yar Khan's Orios Venture, said doctors are getting used to the fact that multiple platforms support them in running the business. “But the pain point is how the entire process can become automated,” said Jha, whose company started as DocSuggest focusing only on appointments with doctors. It has moved into bookings for spas and salons and is in talks to raise over $10 million.

For Google Capital, the investment arm of the global search engine, this deal if successful, will be its third in quick succession in India, having already backed companies like realty classified portal Commonfloor and software firm Freshdesk.

Milner, founder of DST Global which has backed companies from Facebook and Xiaomi to Alibaba and Flipkart, has made personal bets before in India. He holds personal stakes in taxi booking app Ola and realty classifieds startup Housing.